Kitron Asa · OSL:KIT
Kitron Asa — Q4 2009 Earnings Presentation
21 slides from Kitron Asa's earnings presentation, Feb 4, 2010
Slide 1: Q4 results 2009
Q4 results 2009 4 February 2009 Jørgen Bredesen, CEO Björn Wigström, CFO
Slide 2: Positive trend in Q4
Positive trend in Q4 Financial highlights • Strong cash generation: NOK 62.3 million in Q4 • Backlog increased for the third quarter in a row • Revenue down 35.3% vs Q4 last year but trend is positive • Profitability is recovering - operating margin 3.7% in Q4 • Strong performance vs peers through 2
Slide 3: Strategic steps to expand market
Strategic steps to expand market Operational highlights • Improved market conditions • Expanding market coverage and manufacturing network • Small front end EMS company in Germany acquired (subject to financial closing) • Decision taken to set up manufacturing unit in China • Lease agreement signed
Slide 4: Focus on streamlining operations
Focus on streamlining operations Operational highlights • Positive effect of completed downsizing • Headcount reduced by 350 FTE’s in 2009 • Significant reduction of cost base (about NOK 130 million on annual basis) • Decision taken to divest development department • Entering a structured sales proc
Slide 5: Major New Orders (up to 31.01.2010)
Major New Orders (up to 31.01.2010) • Major new orders booked in Q4 • Medical ventilator systems for Maquet (NOK 40 million) • Complex communication equipment for KDA (NOK 28 million) • Protector, weapon control system for KDA (NOK 23 million) • Service order for offshore client (NOK 20 million) • L
Slide 6: Financial statements Q4 2009
Financial statements Q4 2009
Slide 7: Revenue as expected
Revenue Group Revenue as expected 655 551 420 • Revenue at NOK 424 million, 35% lower 424 NOK million 336 than last year • Q4 change by market segment: Q4 2009 vs Q4 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Data/Telecoms -38.5% Revenue by market segment Defence/Offshore -44.1% Total revenue NOK
Slide 8: Revenue by country
Revenue by country * Revenue by country 400 • Norway and Lithuania negatively 287 NOK million affected by drop in Offshore segment Q4 2009 vs Q4 2008 159 130 Norway -28.4% 106 66 Sweden -33.4% Lithuania -48.9% Norway Sweden Lithuania • All operations adjusted to lower Q4 2008 Q4 2009 revenue level R
Slide 9: Profitability improving
Profitability improving Operating profit Group 58.1 • Operating profit in Q4 was NOK 15.8 million (NOK 58.1 million) and margin was 3.7% (8.9%) NOK million 34.3 • Main factors behind lower profit vs Q4 2008: • Revenue lower and different product mix 15.8 • Cost and productivity issues related to the
Slide 10: Profit by country
Operating profit by country * 38.6 Profit by country NOK million • All sites deliver positive Q4 2008 Q4 2009 results and the trend quarter 11.2 11.0 12.2 on quarter is positive. 4.6 1.5 • Actions to turn around Norway Sweden Lithuania Swedish operations are Operating margin by country gradually yie
Slide 11: Cash flow
Operating cash flow Group Cash flow 66.5 62.3 • Cash flow was NOK 62.3 million NOK million 35.0 (NOK 66.5 million) 11.0 • Investment level reduced • Reduction in working capital is driving positive development -14.4 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 • Inventory down NOK 70 million vs Q4 Net wo
Slide 12: Strong equity ratio
Strong equity ratio Equity • Equity of NOK 450.3 million 480.4 478.9 453.6 445.1 450.3 (480.4) and an equity ratio of 45.9% (38.4%) NOK million • Increase in equity ratio driven by total balance reduction • Exchange rate fluctuations and divestments had a negative impact on equity in absolute Q4 200
Slide 13: Kitron Development reclassified to discontinued operations
Kitron Development reclassified to discontinued operations • Decision taken to divest Kitron Development (an operation within Kitron AS) • Reclassification done in financial statements • Balance sheet reclassification of assets (NOK 8.3 million) and liabilities (NOK 5.8 million) • Key financials (fu
Slide 14: Market development
ond Seah canes euecues! & Kitron Market development
Slide 15: Improved market conditions expected
Improved market conditions expected • Medical equipment continues strong trend – several companies ramping up manufacturing • Significant drop in Offshore but signs of stronger market ahead – Defence segment maintains strong development • Data/Telecoms trend mixed • Industry segment is stable 300 Re
Slide 16: Order intake improving
Order intake improving Order intake Group 650 600 550 NOK million 500 450 Total 400 Four quarter moving average 350 300 Q3/2008 Q4/2008 Q1/2009 Q2/2009 Q3/2009 Q4/2009 16
Slide 17: Order backlog is recovering
Order backlog is recovering 971 Order backlog Group 796 • Order backlog at NOK 796 million 732 742 778 NOK million (NOK 971 million) • Backlog increasing for the third quarter in a row • Expected long-term positive Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 development in the Medical Order backlog Segm
Slide 18: Expanding market coverage
Expanding market coverage • A smaller EMS engineering and NPI company acquired • The German EMS market is the largest in Europe • Focus on front-end engineering and NPI • Based primarily on manufacturing in Lithuania and China • Decision taken to establish a manufacturing operation in China • Lease
Slide 19: Outlook
ond Seah canes euecues! & Kitron
Slide 20: Outlook
Outlook • Order intake and backlog expected to continue to improve quarter by quarter • Capacity adjustments expected to yield positive effect on profitability in 2010 • Continued focus on operational improvements (supply chain management, ERP, exit or turn around loss making activities etc) • Stron
Slide 21: Thank you!
Thank youl Our solutions deilver success! Kitron